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Exit issue 530/11/2005. Source: CMBOR.
 Exit provides statistics and analysis on the UK's buy-out exits. The data is compiled by the Centre for Management Buy-out Research with analysis and commentary provided by its sponsors, Barclays Private Equity and Deloitte.
No. of Exits
UK exit market reaches new record for both number and value of realisations in 2004 With the buoyant buy-out market rebounding to its second highest level last year at £20.4bn – exits in the UK surged to a record number of 317. This uplift was an increase of more than 25 per cent on the 247 exits of 2003. All exit routes grew during the year with trade sales, flotations and secondary buy-out numbers rising sharply whilst the number of buy-out failures continued to fall. Altogether this brought a new record for the total value of private equity realisations which reached £18.2bn by the end of 2004, more than double the 2003 total of £8.8bn and well ahead of the previous record of £10.8bn set in 2002. Much of the increased activity last year was due to the continued surge in secondary buy-outs which reached an unprecedented level of 85 and contributed £7.1bn to the total exit value.
Trade sales bounce back having fallen each year since 2000
Last year, trade sales of buy-outs rose by 76 per cent to reach 118 having fallen steadily from the record 141 reached in 2000. Between 1995 and 2000, the number of trade sales had consistently been above the 100 mark; the 2004 total was the first to break this level since then. Buy-out IPOs return to favour in 2004 with AIM now the market of choice for many new private equity listings The reduction in volatility which characterised the stock market last year enabled many more private equity backed buy-outs to gain a listing than had been the case for several years. The total of 30 new listings was the highest since 1997 and was three times the 2003 figure. Many companies now prefer the less stringent listing requirements offered by AIM, with half of all last year’s flotations joining the junior market. The largest IPO of 2004 was the listing of the Barclays Private Equity backed Admiral Insurance, which had a market capitalisation of £711m on the first day of trading. Although buy-out IPOs rose sharply last year the total value of £3.7bn was still slightly below the total of £4.0bn from the 10 new listings which took place in 2003.
Secondary buy-outs hit new high
Secondary buy-outs first sprang to life in 2002 with 65 secondary transactions, almost double the 35 of the previous year. Since then they have become a major feature of the market with many of the largest exits now taking the secondary buy-out route. After the number fell slightly in 2003, to 63 deals, secondary buy-outs were back in force last year. The total reached a new record of 85, which equates to about an eighth of all UK buy-out market transactions for 2004. At £7.1bn the total exit value for secondary deals was also a new record, well above the previous peak of £4.4bn reached in 2002.
Buy-out failures decline for second consecutive year
Receiverships of buy-outs rose each year; from 84 in 1999, reaching 122 by the end of 2002. Since then the level of failures in the buy-out market has slowed. There were 107 recorded in 2003, with the total falling by a further 21 per cent last year to once again match the 1999 figure of 84.
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© CMBOR 2005. Used on AltAssets with permission.
The Centre for Management Buy-out Research (CMBOR) is sponsored by Barclays Private Equity Limited and Deloitte at the Nottingham University Business School. TCMBOR was founded by Barclays Private Equity Limited and Deloitte at Nottingham University Business School in March 1986 to monitor and analyse management buy-outs in a comprehensive and objective way. As an independent body, CMBOR has developed a wide-ranging and detailed database of over 18,000 companies, which provides the only complete set of statistics on management buy-outs and buy-ins in Europe. CMBOR publishes regular reports on buy-out trends in its Quarterly Review, as well as the results of specialist survey and case study research on relevant issues both in buy-outs in the UK and Western Europe. CMBOR publishes regular reports on UK buy-out trends in its Quarterly Review, as well as the results of specialist survey and case study research on relevant issues both in buy-outs in the UK and Western Europe. The annual European Management Buy-out Review is produced to complement this, providing an analysis and review of buy-out trends throughout Continental Europe. Our new publication, Exit, provides definitive statistics and analysis on buy-out exits. Centre for Management Buy-out Research (CMBOR), Nottingham University Business School, Jubilee Campus, Wollaton Road, Nottingham, NG8 1BB, +44 (0)115 951 5493, Andrew.Burrows@nottingham.ac.uk, www.cmbor.org
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